2014 (2) TMI 248 - AT - Service Tax

Demand of service tax - Benefit of Notification No. 45/2010-ST dated 20.7.2010 - Exemption from levy of service tax on all taxable services relating to transmission and distribution of electricity - Revenue denied benefit due to lack of nexus between services rendered by the respondent with distribution of electricity - Held that - nature of activity (supply of manpower for construction of substation for the purpose of distribution of electricity) and examining the provisions of notification, we are, at this stage, unable to disagree with the above finding of the Commissioner (Appeals). Prima facie, there was a nexus between the service in question and distribution of electricity by the above company. This apart, the appellate Commissioner s order does not appear to be executable - Stay denied.

Summary

Issues:
1. Stay of operation of the impugned order regarding service tax exemption under Notification No. 45/2010-ST.
2. Claiming benefit of exemption for services related to transmission and distribution of electricity.
3. Nexus between services rendered and distribution of electricity.
4. Appeal against the finding of the appellate Commissioner.
5. Prima facie assessment of the nexus between the service and distribution of electricity.
6. Rejection of plea for stay of operation of the impugned order.

Analysis:
The judgment pertains to an application seeking a stay of operation of an order where a demand of service tax was set aside by the Commissioner (Appeals) based on the claim of benefit under Notification No. 45/2010-ST related to services concerning transmission and distribution of electricity. The respondent had supplied manpower for the construction of a substation by a power distribution company, leading to a close nexus between the services provided and electricity distribution. The appeal challenges the finding of the appellate Commissioner on this matter.

The Additional Commissioner reiterated the grounds of appeal and requested a stay of the impugned order, noting the absence of representation from the respondent. The Tribunal, upon evaluating the nature of the activity involving the supply of manpower for substation construction for electricity distribution and analyzing the relevant notification, found a prima facie nexus between the service in question and the distribution of electricity by the company. Additionally, the Tribunal observed that the appellate Commissioner's order seemed non-executable, leading to the rejection of the plea for a stay of the impugned order.

In conclusion, the Tribunal upheld the finding of the appellate Commissioner regarding the nexus between the services rendered and electricity distribution, thereby denying the plea for a stay of the impugned order. The judgment emphasizes the importance of establishing a clear connection between the services provided and the specific exemption claimed under the relevant notification.